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Started by PocketOption, Feb 04, 2023, 11:23 am

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Gold Plunges 2% After Putting in a 9-Month High

Thursday found markets in profit-taking mode ahead of the Non-Farm Payrolls and as major central banks all delivered hikes that aligned with expectations. Gold and EUR/USD reached a 9-month high before reversing losses as the dollar advanced since there were no surprises.


Key Factors for Today

  • Gold and Euro plunge following ECB, stronger dollar

  • Cable turns after BOE signal to end hiking cycle

  • US indices continue to print fresh multimonth highs

  • Aussie eyes 70 cents again

  • NatGas

ECB Hike Sends EUR/USD Above $1.10

The ECB’s decision to hike rates sent the EUR/USD above the $1.10 handle at $1.1033, but gains quickly reversed as this was within expectations. Christine Lagarde insisted that conditions warranted another 50bps hike in March, but that would be a time to reevaluate the rate path. But markets focused more on the latest inflation drop instead, and the pair closed 0.70% lower at $1.09. $1.08 is the next support.

Cable Plummets 1.20% as BOE Signals End of Hiking Cycle

After raising rates by 50bps as expected, with a 7-2 vote, but cautioned about further hikes. The language in the statement changed, suggesting that the terminal rate was near. Andrew Bailey said there were signs inflation had turned the corner, but it was too soon to declare victory. The pound plummeted 1.20% to $1.2223 and remains under pressure on Friday morning. $1.2150 is the next support in focus, with $1.2285 making resistance.

US Indices Spike Higher Despite Dollar’s Rise

In a continuation of the reaction to the Fed’s latest rate hike, risk appetite improved with a jump in trading volume, despite the dollar rising. Both Nasdaq and the S&P 500 posted more than 1% gains but seemed to have found a top at 12895 and 4200 after APPLE and Amazon missed expectations. The former saw a more significant rejection as a result, with 12470 a crucial short-term support ahead and after today’s Non-Farm Payroll. In the latter’s case, all eyes turn to the 4k handle.

Australia Home Loans Fall Ahead of RBA Decision

Australia’s NAB business confidence declined for the first time since 2001, with the largest drop in the mining sector. Home loan values also dropped further than expected. Aussie dropped from a high of $0.7158 and back towards the 70 cents on the back of the data and a stronger dollar. The latest poll suggests the RBA will hike by a quarter point over the next two meetings, which might help the pair sustain its posture above the said support.

On the docket

  • EA, UK and US S&P PMIs

  • Non-Farm Payrolls

  • ISM Non-Manufacturing

FX 1-day relative performance (USD)

  • Aussie and euro 0.30% and 0.17% lower

  • Loonie and Swissy down 0.12%

  • Cable and kiwi 0.11% in the red

  • Yen nearly unchanged, only 0.05% up

  • Silver and gold 0.21% and 0.11% lower

  • Crude and brent 0.24% and 0.19% lower

The post JASPER’MARKET SQUAWK 03-02-2023 appeared first on Key To Markets Blog.

Source: JASPER'MARKET SQUAWK 03-02-2023